ALL-AROUND CAPABILITIES, ALL AROUND THE WORLD OCTOBER 2010 IN THIS ISSUE What’s New In Birmingham? 3 Century Circle: Universal Warehouse Improves Customer Satisfaction These are exciting times for “K” Line in Birmingham, Alabama. 4 Century Circle: Century Richmond Welcomes Back Bill McGough 5 Air Cargo Update: The Obama Administration’s Export Control Reform Announcement 6 My Kind of Town, Chicago Is 7 Customs Corner: Global Customs Requirements Continue to Increase 8 “K” Line Canada Ltd Receives Blue Circle Award 9 “Visiting Author” My Aunt’s Gift This hub, in the center of the state and about halfway between Memphis and Atlanta, has never been a big container market for “K” Line. That should be changing now that Norfolk Southern (NS) and Union Pacific (UP) have teamed to develop a rail product serving Birmingham off the West Coast. Lines that contract with Burlington Northern Santa Fe Railway (BNSF) have dominated the Birmingham market for years as BNSF had exclusive rail access off the West Coast. However, as soon as UP and NS began operating their Meridian Speedway product shortening the distance between Atlanta and the West Coast, “K” Line was negotiating with them to include Birmingham in this service as well. Birmingham lies directly (continued on page 2) 10 The Incredible Voyage 11 KAM Marine Operations The NS Birmingham ramp. From the Desk of Mr. Takashi (Sam) Saeki 12 20th Anniversaries Across KAM 14 SAL Training for Sales; Weddings 15 The Wellness Corner: Know Your Numbers 16 Baby Greetings; Milestone Anniversaries; Welcome Aboard; Equal Employment Opportunity Policy ™ Overview of 1st Half 2010 On September 30th, “K” Line closed the first half of this fiscal year, and an official financial report will be published before the end of October. Our results for the first half are looking great for both the containership business sector and the company as a whole. This is an amazing recovery from the disastrous FY 2009 results. Good lifting results associated with the rate recovery in our containership sector across all trade lanes made this miracle happen. After Takashi (Sam) Saeki the severe financial and economic crisis of 2008, all containership carriers without exception had no choice but to deploy drastic measures including laying-up an excess capacity of vessels, conservation steaming, organizational restructuring for expense reductions, and many more such measures – just to survive. Noteworthy, conservation steaming extended equipment turn times which, coupled with carriers providing less capacity, generated many challenges for our industry. Meanwhile, while the economy of the USA and Canada (continued on page 2) ® Promoting the team spirit for all colleagues within “K” Line America, Inc.; “K” Line Total Logistics ; Century Distribution Systems, Inc.; “K” Line Canada Ltd.; “K” Line Logistics (U.S.A.) Inc.; and “K” Line New York. From the Desk of Mr. Takashi (Sam) Saeki (continued from page 1) had not yet recovered, we still experienced a surge in cargo to normalize the level of inventory being held by retailers which had been at lower levels since the financial crisis of 2008. With these elements in place, the demand and supply situation for most container trade lanes during the first half of the current FY turned into a much tighter scenario than anyone anticipated. In order to meet such strong space requirements at the time, carriers began to return laid-up ships back into service week by week, and presently very limited tonnage remains idle. Outlook for 2nd Half 2010 Our second half of this fiscal year (October/10 – March/11) is not being projected to be as bright as the first half with regard to demand and supply. Even during the 1st Half, carriers took deliveries of new buildings with more capacity to come with the 2nd Half. Unfortunately, there will not be any surge in import cargo to fill inventory as inventory levels are reportedly back to normal now. Almost all economic indicators are yet to reflect signs of recovery within the foreseeable future. In particular, home sales, automotive sales, and the job-less ratio are indicative that it may take years to bounce back to the levels enjoyed prior to the Great Recession. Hence, our business plan for the 2nd Half FY is designed in line with these specific assumptions. Our 1st Half results were good, but our 2nd Half outcome most likely will not be as favorable. The budget for “Almost all economic indicators are yet to reflect signs of recovery within the foreseeable future. In particular, home sales, automotive sales, and the job-less ratio are indicative that it may take years to bounce back to the levels enjoyed prior to the Great Recession.” TPS/AW/SINA/TAS combined for the 2nd Half reflects a very marginal profit versus about $70M profit for the 1st Half. As you can see, an anticipated downward trend in liftings and revenue is taken into consideration with our 2nd Half budget, and thus the number is achievable unless unexpected issues occur. With this in mind, I earnestly request each of you to perform your assigned duties well and remain by me to successfully achieve this 2nd Half budget without fail. Feeling Better In this second “K” Files message to you, let me introduce a bit of magic to help you feel better during those times when you are facing an uneasy situation in performing your job within “K” Line. Some 25 years ago, I was summoned to The Japanese Shipowners’ Association from “K” Line Tokyo to serve for three years within the International Affairs Department. Much to my surprise, this assignment was somewhat boring in dealing with various international maritime issues which are governed by UNCTAD and other organizations. Working for the benefit of the entire shipping industry was fine enough, but the objectives were too vague for me to motivate myself when compared to my earlier challenges day by day at “K” Line. One day I was grumbling about this so my boss at the time took me to dinner that same evening. Over our meal together he said: “Yes, our jobs are sometimes boring, sometimes painful, and many times frustrating. That is why you received regular paychecks as compensation. If you are enjoying your job, you should pay the company in appreciation.” Whenever I feel frustrated with my work, I try to remember his words which always make me feel better. Try this magic when you are feeling down – it will also work for you. Enjoy the nice autumn weather after such a hot summer. Sincerely, Takashi (Sam) Saeki President & CEO “K” Line America, Inc. P.S. Anybody who is enjoying working with us at “K” Line is kindly requested to return your paychecks to my attention at Richmond headquarters by the end of each month. Just kidding! (continued from page 1) What’s New In Birmingham? on the route that the Speedway uses. The route is 300 miles (about half a day) shorter than the BNSF route. A product was developed by the railroads this year and, as of mid-September, “K” Line started using the newly developed Speedway product serving Birmingham. We’re beginning small compared to lines 2 who have had a direct rail presence into Birmingham for years, but we’re hopeful and are working hard to grow our market there in the 2011 service contract season. NS’s confidence in the outlook of Birmingham has resulted in their securing funds to break ground on a new facility in early 2011, scheduled for opening in 2012. This vibrant, beautiful city is nestled in the rolling foothills of the Appalachian Mountains. Birmingham is ranked as one of the most important business centers in the Southeast. It is situated with both north/south and east/west interstate access and rail access by the major U.S. railroads. As a major transportation hub that is experiencing population growth, a strong automotive assembly and manufacturing presence, and a growing distribution base, Birmingham is a great place for “K” Line to serve for our customers. Contributed by Dave Daly – KAM RIC C I R C L E Universal Warehouse Co. Improves Customer Satisfaction by Providing Real-time Inventory Visibility Through Warehouse Automation. W ith the introduction of barcode technology almost two decades ago, the barcode has now become the core automation feature of modern warehouses and distribution centers. When barcodes are used in conjunction with Radio Frequency transmitting and a Warehouse Management System (WMS) this technology can dramatically increase inventory accuracy and streamline warehouse operations. The Universal companies provide that strategic link in the KLTL supply chain, once the import containers depart from a marine terminal and the customer’s merchandise is devanned and staged for order fulfillment and outbound shipments. Universal Warehouse Co. (Long Beach, CA and Auburn, WA) have implemented a new Warehouse Management System from Datex Corporation, called “FootPrint”, whose primary purpose is to control the movement and storage of materials within the warehouse. The system also provides multiple value-added services, designed to attain the highest level of production, throughput, and order fulfillment. It provides complete functionality and automation in all the areas of the warehouse such as receiving, 3 put away, inventory control, picking, packing, outbound shipping, cross docking, and transloading in conjunction with inventory visibility to our KLTL customers via UWC’s Datex web portal. The system uses Radio Frequency and Barcode Technology to capture information in real-time eliminating the use of pen and paper and providing customers with fast and accurate information. Radio Frequency allows the system to update process-stages as they occur, eliminating the delay between the front office and the warehouse floor. As soon as an order is received, picked, or shipped, the system updates the information in the database confirming to the customer that the updated status has been achieved. The use of bar-code scanning and mobile computing greatly reduces the possibility of errors in data capture and enhances the speed of order processing. Mobile computers are also used throughout the facility to communicate to users the tasks and operations that need to be completed, the location of merchandise and the quantities. This allows personnel to confirm the completion of each task before moving onto the next. The data can be communicated electronically to customers via xml, csv, ASCII x12 using EDI, ftp, http or email. (continued on page 4) C I R C L E Century Richmond Welcomes Back Bill McGough after Five Year Tenure in Asia. I n February, Bill McGough returned to the United States to head up Century Distribution Systems’ Sales and Account Support efforts in North America. Bill replaces Tim Craig, who transferred to KAM’s Liner Marketing and Pricing Department after working with Century for eight years in various roles. Prior to assuming his present duties as Vice President of Sales and Account Support, Bill was based in Hong Kong, first as Assistant Director and, then, as DirectorAsia for Century. During his five years in these positions, Bill oversaw all of Century’s operations from the Indian Sub-Continent to Japan. The primary responsibilities of these jobs were operational and administrative, basically to ensure that Century’s team in Asia provided uniform, quality services according to customer specifications across the region. On the face of it, this sounds simple enough. It wasn’t! Bill faced constant challenges as he managed a very large staff over a broad geographic area, balancing the (continued from page 3) Universal Warehouse Co. The web portal referred to as the e-Portal, is fully integrated into the Warehouse Management System. It works as an extension of the system providing our customers an additional resource for accessing information about their products and inventory anytime and anywhere, as well as the ability to place their outbound shipping orders based upon their actual inventory. With this tool, our customer can have full visibility and control of their inventory, orders and access to various activity reports on their own computer. This enables customers to finalize sales and place merchandise orders quicker – in a real time environment. In order to accomplish this level of automation, locations were bar-coded with 4 Bill McGough need to satisfy both customer requirements and local regulations along the way. His efforts left Century with an even stronger network in our prime market than the one he inherited. In addition, Bill got involved in many a Radio Frequency network installed throughout the 230,000 sqft Long Beach warehouse (and its 20-acre container yard) and at the 148,000 sqft Auburn facility. Bar code reflective signs were suspended from the 30 ft ceiling with sufficient clearance for special projects. Examples included a DC Bypass program for a “bricks and mortar” retailer and a hub consolidation program in China for a major industrial supply company. Bill built these programs from the ground up, assembling the various resources necessary to turn concepts into reality. Bill also played a key role in expanding Century’s network in the region. He oversaw the opening of four new offices in China during his tenure. Prior to his time in Asia, Bill spent three years with Century in North America and secured several large customers who are still with Century today. Before joining Century, he worked for over seven years with APL Logistics and DCL. Bill will put all of the knowledge and experience he acquired in Asia to work in his new role in North America. We believe that his detailed understanding of origin operations will be invaluable to our efforts to expand our business in the years ahead. Contributed by Mark Gorman – CDS RIC stacking freight and are used for identifying the pallet position locations. The initial process of transitioning customers is done by taking a complete physical inventory count to synchronize the materials/items and locations into the FootPrint system. Bar-coded “license plates” are applied at pallet/carton level in order to scan freight upon receiving, putaway and shipping. With the implementation of FootPrint, we are able to handle accounts with large inventories with the same ease as customers with smaller pick-pack inventories and shipping to multiple destinations. UWC and UWC-NW are capable of providing modern warehousing Bar Code technology in this wireless RF environment and customers benefit with increased efficiencies in receiving, putaway, picking, shipping and inventory counting. Contributed by Shamila Mustafa, Christine Robinson and Rich Ferguson of UWC Long Beach. A I R C A R G O U P D A T E The Obama Administration’s Export Control Reform Announcement. O n August 31, the White House announced its plan to reform both the policy and process for controlling the export of militarily sensitive commodities and technologies in the Bureau of Industry and Security (BIS) Annual Update 2010 Conference at Washington, D.C. via video message presentation. (http://www.bis.doc. gov/index.htm). As the first President ever to speak in detail about export controls to a group of export executives, President Obama underscored the importance of the reform program at the highest level of the White House concerning both National Security and Economy issues. As much as Health Reform affected and changed the health insurance industry, this Export Control Reform may change the paradigm in the export business community, especially for export shipments required licenses from various United States government agencies. While President Obama enumerated four main points of the plan – the four singularities – he emphasized the administration’s broader agenda of improving the economy and creating jobs through increased exports. Due to National Security reasons after the 9/11 terrorist attack, the current system has evolved needlessly complicated and created counterproductive standards for controlling exports. The United States’ export control system has long been in need of reform. America’s allies and overseas’ legitimate buyers find it difficult to work with U.S. government and industry partners to develop, procure, and, ultimately, operate advanced weapons systems in a cooperative fashion. Consequently U.S. industries and exporters are at a disadvantageous position in marketing their products to even close and reliable allies. Therefore, the U.S. economy and business has lost competitiveness and 5 jobs in related industries. Many believe it was long overdue to make this Export Control Reform. The administration’s goal is to have a single control list that incorporates both military and commercial goods that require licensing, a single agency to issue licenses, a single enforcement agency, and a single computer system to manage the control list. (See sidebar below.) President Obama’s address can be found at: http://www.whitehouse.gov/the-pressoffice/2010/08/30/video-remarks-president- department-commerce-annual-exportcontrols-updat The remarks by the President that were delivered via videotape on August 31, at the Department of Commerce’s Annual Export Controls Update Conference in Washington, D.C. are on page 6. Also, a speech by Department of Commerce Secretary Gary Locke can be found at: http://www.bis.doc.gov/news/2010/ seclocke_bis_update_remarks .htm Attended and contributed by John Jeong – KLLUSA 1. With this export control reform initiative, the United States government will have a single set of licensing policies. 2. The U.S. government will create a single agency to issue licenses and an Export Enforcement Coordination Center to coordinate and strengthen enforcement efforts across all relevant departments and agencies. 3. ll agencies will transition to a single IT system, making it easier for exporters to seek licenses. President Obama’s Remarks on the Export Control Reform Announcement. “Hello everyone. I’m sorry I’m not able to be with you in person today, but I’m pleased to have the chance to join you by video to talk about our Export Control Reform Initiative. About a year ago, we launched a comprehensive review of our export controls and determined that we need fundamental reform in all four areas of our current system – in what we control, how we control it, how we enforce those controls, and how we manage our controls. I want to thank Secretary Locke, Secretary Gates, Secretary Clinton and many others for their work on this initiative. And, today, I want to highlight the key elements of our new approach and the first steps toward its implementation. For too long, we’ve had two very different control lists, with agencies fighting over who has jurisdiction. Decisions were delayed, sometimes for years, and industries lost their edge or moved abroad. Going forward, we will have a single, tiered, positive list – one which will allow us to build higher walls around the export of our most sensitive items, while allowing the export of less critical ones under less restrictive conditions. In the past, there was a lot of confusion about when a license was required. It depended on which agency you asked. Now, we will have a single set of licensing policies that will apply to each tier of control, bringing clarity and consistency across our system. In addition, I plan to sign an Executive Order that creates an Export Enforcement Coordination Center to coordinate and strengthen our enforcement efforts – and eliminate gaps and duplication – across all relevant departments and agencies. Finally, right now, export control licenses are managed by multiple, different IT systems or, in some cases, even on paper. Going forward, all agencies will transition to a single IT system, making it easier for exporters to seek licenses and ensuring that the government has the full information needed to make informed decisions. While there is still more work to be done, taken together, these reforms will focus our resources on the threats that matter most, and help us work more effectively with our allies in the field. They’ll bring transparency and coherence to a field of regulation which has long been lacking both. And, by enhancing the competitiveness of our manufacturing and technology sectors, they’ll help us not just increase exports and create jobs, but strengthen our national security as well. All of this represents significant progress. And, as we implement these reforms and take further steps – including working to create a single licensing agency – I look forward to working with both Congress and the export control community to ensure their success. Thank you.” My Kind of Town, Chicago Is. I n searching through song titles to spice up this article about “K” Line’s new operation in Chicago, I wasn’t disappointed in the number of Chicago songs available to choose from. From megahits like the Super Bowl Shuffle (song and video by ’85 Chicago Bears football team) to lesser known songs like We’re All Crazy In Chicago and On a Freezing Chicago Street to epics like Bad, Bad Leroy Brown, there are many songs about Chicago. With all the choices out there I think the song made famous by Frank Sinatra is the most appropriate choice. “K” Line’s Kind of Town, Chicago is. “K” Line handles a lot of containers through Chicago, by far “K” Line’s largest inland hub. Over a third of our rail traffic is either destined to Chicago or originates there. Another large portion of our business just moves through the city as Chicago is used as an interchange point where the Western railroads connect with the Eastern railroads. This summer the Union Pacific (UP) opened a new 500-acre intermodal terminal in Chicago called Joliet Intermodal Terminal (or more commonly known as Global 4). 6 Global 4 rounds out a series of terminals UP operates in Chicago and resolves existing capacity constraints UP has had while also meeting UP’s growth requirements long into the future. While “K” Line will continue handling cargo through Global 2 in Northlake, IL and Global 3 in Rochelle, IL, we’ve transitioned the majority of our business to this new, state-of-the-art facility with Aerial view of the UP Global 4 facility. its strategic location. The terminal is located with close access to endemic. By the end of the month, “K” Line Interstates 55 and 80, is next door to BNSF’s had finished the transition and was operating JIT facility, and is in the heart of Chicago’s business as usual. expanding network of distribution centers. Implementing service at Global 4 The facility opened on August 1 with required the effort of staff throughout our “K” Line beginning our transition on that organization in virtually every department. day. UP’s operation and “K” Line’s transition Congratulations to everyone on a job well to Global 4 has gone very smoothly with done, as this was a major change that “K” Line and UP responding to the limited happened seamlessly and successfully for problems that did surface very quickly in “K” Line and our customers. order to resolve them before they became Contributed by Dave Daly – KAM RIC C U S T O M S M C O R N E R Global Customs Requirements Continue to Increase. any of you may be familiar with the changes faced by the shipping industry in December 2003 when U.S. Customs and Border Protection implemented the Trade Act of 2002. The regulation provides for advance manifesting requirements for cargo imported into, or moving in-transit through, the United States. It is most commonly known as the US24Hour Rule, so named for the requirement to submit the manifest data to U.S. Customs and Border Protection no less than 24 hours prior to the vessel arrival at the load port. This was just the beginning, as in April 2004 the Canada Border Services Agency implemented a very similar program for advance manifest requirements known as the CA24HR Rule. Next, in September 2007 Mexico Customs also implemented an advance manifesting regulation known as the MX24HR Rule. The individual customs agencies review the manifest data, each using their predefined risk assessment protocols to determine if the cargo is acceptable to be loaded onboard the vessel calling their country. The customs agency may issue a Do Not Load Hold instruction for a particular Bill of Lading, and require additional information before the hold will be removed. Continued threats of terrorism and heightened security concerns have prompted other countries to begin defining their own advance manifest risk assessment requirements and systems. In December 2009, China customs implemented their advance manifest requirement for all cargo destined for the Shenzhen region, with the intention to expand to all customs regions. This is known as the CN24HR Rule. KAM has been sending all data for all regions since January 2010. On January 1, 2011, the European 7 Union Customs Commission will require advance manifest data to be submitted for all cargo imported into, or moving in-transit through any EU member state. This is known as the EU24HR Rule. There are currently 27 EU member states: Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, and United Kingdom. So, what exactly do the new CN and EU 24HR Rules mean for our export customers? And what are the impacts to the National Operations Service Center (NOSC) Export Vessel Close and Documentation processes? See the sidebar below. The NOSC Import Teams were not left out of the fun either. U.S. Customs and Border Protection has strengthened its import reporting requirements and increased its exam processes. Beginning January 2010, all shipments imported into, or moving intransit through the United States must have an Importer Security Filing submitted. These are known as the ISF10 for import cargo, and ISF5 for in-transit cargo. U.S. Customs and Border Protection has also increased the Non Intrusive Exam (X-Ray) of containers, moving toward the goal of 100% container screening. As you can see, customs regulations are rapidly changing all over the world – resulting in a safer, more secure supply chain. Contributed by Stephani Yogi - KAM RIC Export Customers: • For shipments loading in the U.S. or Canada destined to China or any of the EU member states, our export customers must provide the complete Bill of Lading (BL) instructions to KAM’s Documentation Department in Richmond before cutoff or the shipment will be rolled. NOSC Export Teams: • Establish and enforce Documentation cutoff, and enforce a No Doc No Load policy for cargo to the destination countries. • Finalize BL data in the Global Application system (GApp) and submit the manifest data to the destination customs agency no less than 24 hours prior to the vessel arrival at the load port. • Manage customs responses such as data acceptance and 24 hour clock start date/time, BL data rejections, and Do Not Load Hold messages. • Reconcile Booking and BL data to identify loading candidates. • Identify cargo that cannot load due to missing or late manifest, or Do Not Load Holds. Communicate with Richmond Planning and Liner Operations and local offices to ensure cargo is not loaded. “K” Line Canada Ltd. Receives Blue Circle Award. T he fifth annual JOC Canada Maritime Conference took place in Montreal on September 14–15, and “K” Line Canada, Ltd. was honored. The Port Metro Vancouver presented the Blue Circle Award. Lark Ford, Sales Manager, “K” Line Canada, Ltd. represented the company and accepted the award. This EcoAction Program promotes attainable emissions reduction goals for ocean-going vessels that enter the port. It was formerly called the Differentiated Harbour Dues Program. According to Port Metro Vancouver, the title Blue Circle Award is derived from: • The ‘circle’ being nature’s perfect shape — having no beginning and no end, it elegantly symbolizes sustainability. • ‘Blue’ is symbolic as we live on a blue planet, with the importance of three fourths of the globe being composed of ocean becoming more and more evident. Contributed by Lark Ford – KLC MTL Accepting certificates at the Conference: (Left to Right): David Cardin, President, Maersk Canada; Lark Ford, Sales Manager, “K” Line Canada; Holger Oetjen, Senior Vice President, Hapag-Lloyd; and Peter Xotta, Vice President, Planning & Development, Port Metro Vancouver. 8 Port Metro Vancouver Launches Blue Circle Award for Shipping New award honours cleanest port-users. Port Metro Vancouver is launching its new Blue Circle Award for the EcoAction Program for Shipping, a user-friendly financial incentive for shipping lines that reduce emissions of their ocean-going vessels. A global leader in Port sustainability, Port Metro Vancouver is committed to working with its customers and industry stakeholders to achieve reduced air emissions and a smaller carbon footprint. “Long-term sustainability is a top priority for Port Metro Vancouver,” said Robin Silvester, President and Chief Executive Officer of Port Metro Vancouver. “Our EcoAction Program for Shipping is a unique way of encouraging cleaner ships to our gateway. The Blue Circle Award is in recognition of the EcoAction program participants’ commitment to environmental stewardship,” he said. Port Metro Vancouver emissions reduction programs have received international acclaim, having been awarded the Globe 2010 ecoFreight Award for Sustainable Transportation. The Port has also been credited for its Air Action Program, having been nominated for the International Sustainable Shipping Award. The Port has also brought shore power to Canada Place making 2010 the first eco-friendly cruise season. Under the EcoAction Program for Shipping, formerly known as the differentiated harbour dues program, vessels that qualify will be eligible to receive the newly established Blue Circle Award, a recognition reserved for only the highest emissions reduction achievements. The Blue Circle Awards honor gold, silver or bronze ratings based on efforts to reduce air emissions, depending on the quality of fuel used and overall emission reductions. Vessel operators can apply for the program at each call or provide an annual declaration for their vessels. “I am pleased to acknowledge the ongoing efforts of Port Metro Vancouver as they provide incentives for industry to reduce their carbon footprint and air emissions,” said John Yap, Minister of State for Climate Action. “Greening our tourism industry is an important step in the right direction and is good news for Vancouver, and all Port users and I applaud the efforts of the shipping lines being honored today with the Blue Circle Award.” By awarding the Blue Circle Award, Port Metro Vancouver acknowledges industry commitment to Port sustainability. This year’s recipients are: • Holland America Line • Hapag-Lloyd (Canada) Inc. • “K” Line Canada Ltd. • Maersk Canada Inc. • Princess Cruises • Regent Cruise Line • Seaboard International Shipping Company Limited • SilverSea Cruises • Westwood Shipping Lines “ V I S I T I N G ” A U T H O R My Aunt’s Gift. Margaret Swor – KAM CLV I grew up during the 1950’s in Cleveland, Ohio. My family and I lived within an East European community, where daily life had very little to do with the world beyond its streets, but I knew I could travel far beyond those streets. I had my books with stories of King Arthur, the Arabian Nights, fairy-tale stories with strange creatures and people. With my imagination, I would enter their world. I would fight dragons and dance with the fairy-tale princesses and princes. So much of me wanted their world to become real. I wanted to become a part of it all. I spent many a summer’s day dreaming of such things. On such a summer’s day when I was about 8-years-old, my world changed forever. I was playing in the backyard, when my grandmother called me to come into the house. My uncle was home and I was to meet my new aunt. During this time my uncle was in the Navy. In my imagination, I saw him sailing the seven seas, seeking adventures, traveling to faraway places and rescuing beautiful princesses from evil wizards. When he came home, he would bring me a present. As I raced into the house, I wondered if, since he was bringing me a new aunt, would there still be a present? I came to a sudden stop when I saw her! She was standing next to my grandmother and uncle. I had never seen anyone who looked like her, nor dressed the way she was dressed. To an 8-year-old, she was really strange. She seemed small as she stood next to my uncle. Her face was round with dark, almond shaped eyes. Her hair, worn up, glowed from the light that seemed to fall all around her. She wore clothes, but not like my grandmother’s. They were more like a long black coat with long hanging sleeves with a red and white floral print. Around her waist was a wide piece of red fabric, tied with many braided cords. Her socks made it look as if she only had two toes. Her shoes looked like my flip-flops—only nicer. I had no idea what I should do. My uncle, seeing my uncertainty, stepped forward and explained: “This is your Aunt Yoriko. She’s from Japan.” Okay, I 9 Margaret Swor, kneeling left, and her Aunt Yoriko, kneeling second from left, at the Fuji Club in Cleveland, Ohio in 1959. thought, this means nothing. I had no idea what or where Japan was. He continued: “Japan is an island far across the sea. My ship sailed there, we met, fell in love and now she’s come here to live with us.” Inside I felt myself panicking. Live with us!? What if we don’t like her? What if she doesn’t like us? Even as I kept staring at her, she smiled, bowed slightly, softly saying strange sounding words. Well, she did sound nice. Her smile was pretty. She was pretty. So what if her clothes were odd? Some of the fairytale princesses I read about wore odd clothes and they turned out to be nice. Maybe she was like them. Maybe… Then I understood. My Aunt Yoriko was a fairy-tale princess. Japan was the magic island she came from. My uncle went there on an adventure and rescued her from an evil wizard. Now fully understanding it all, I smiled as I walked toward her, saying: “Hi, will you tell me stories about where you come from? Can we be friends?” I tried to bow like her, only to stumble and start to fall. She reached out, caught me, and held me close. I looked into her eyes and saw the love she had for me. As our eyes held, she whispered, “I will tell you many stories. And we will be friends.” And, there were stories, beautiful stories. Together, we would go to many places where the people looked and dressed just like my aunt and they were just as nice and kind. In her special store, I found books with strange writings that I knew were magic spells, that if I could just learn to read them, I could make the pictures come alive. My most favorite place, though, was the Fuji Club. This was a social meeting place for people like my aunt. For me, it was a magical palace where fairy-tale princesses and princes would gather, dressed in their colorful, strange clothes. They would talk in their magical language while floating all around us were mystical sounds. We ate our food with sticks. I really liked the food- definitely not my grandmother’s hash or oxtail soup. Like Cinderella, I had my own ball gown. My aunt had given me a dress much like hers, only red with white flowers, a green sash, socks, and red shoes. My very first pair of red shoes! The Fuji Club was my aunt’s world and these were my aunt’s people. I embraced it all with love and joy. In turn this world held me close. It became a part of me as I became a part of it. I was accepted. I belonged and I wanted to stay forever. This was my first contact with the world that existed outside my neighborhood. It was frightening, but something deep within me wanted to reach out, to learn, and not to be afraid. It was my Aunt Yoriko who taught me how to reach out. She had met someone who was different from her, yet, she found love. With this love she was able to step outside her world and enter a world that was strange and frightening. Within herself she found strength and courage to go beyond the fear and to find beauty and peace. I have learned from my aunt to fill my heart with love. With this love I found my inner strength and courage to overcome my fear of the unknown and, then, to begin my journey of discovery and to become a better person for it. With all my heart, I love my Aunt Yoriko, for who she is and for what she helps me become. I will always lovingly embrace her world, the magical island where fairy-tale princesses and princes come from. The Incredible Voyage: “K” Line and KAM Sail to the U.S. Supreme Court. T he voyage of “K” Line and KAM to the United States Supreme Court began on April 21, 2005. On that day, Container TRLU 273341, carrying a cargo of steel molds weighing 11,000 kilos under a “K” Line bill of lading (and an NVO bill of lading) was part of a Union Pacific doublestack train. The train was made up of 87 cars with four units of motive power, on its way from California to Chicago. It was 6091 feet long, weighed 5,673 tons, and was travelling at 70 miles per hour when the heavy steel cargo breached the container and fell to the roadbed at mile post 443.0 between Pratt, Kansas and Tyrone, Oklahoma. The container was loaded aboard the 33d car back from the front of the consist, and the sudden deposit of the molds onto the roadbed derailed the 33d through the 52d cars. Debris was found on the roadbed as far as five miles west of the point where the derailment occurred. The UP had a major cleanup and repair job on its hands. How could this happen? That question is still in litigation in cases pending in federal district court in New York. As can be expected, the experts for the warring parties hold different opinions as to the cause. What we do know is that the injection molds, used for making plastic products, were loaded and sealed in the container at a container freight station in Shanghai by the Shanghai Ocean Shipping Talley Co. Why the molds stayed in the container all the way to the U.S. heartland only to take their “Pratt-fall” between Pratt and Tyrone may never be known, but cargo interests, the UP and “K” Line have been fighting it out for years in courts from New York to California. So, how did we end up in the highest court in the land? We were defending the integrity of the “forum clause” in ocean carriers’ bills of lading, which in “K Line’s bill says that all disputes under the bill must be heard in the Tokyo District Court. But, as you will see, there was much more to the case than just the defense of the forum clause – we were also protecting our status as ocean carriers with the benefit of the liability provisions of the Carriage of Goods by Sea Act (COSGA), carriers who are regulated 10 solely by the Federal Maritime Commission, not the Surface Transportation Board (which regulates rail carriers). Some cargo interests (or their insurers) sued UP and “K” Line in New York but four sued “K” Line, KAM and the UP in California, and that California action led to the Supreme Court. The California federal district court dismissed the cases, finding that the Tokyo forum clause was reasonable and enforceable, and that UP enjoyed the benefit of it via the “Himalaya Clause” in the “K” Line bill of lading, which extends bill of lading protections to sub-contractor carriers. A non-vessel operating common carrier was the shipper on the “K” Line waybill, but the “K” Line long form bill of lading terms applied to all cargo interests, which are included in the term “Merchant” in the long form bill of lading. The United States Court of Appeals for the Ninth Circuit, sitting in California, disagreed with the district court, and held that the forum clause could not be enforced because a part of the Interstate Commerce Act, known as the “Carmack Amendment,” precluded its application. The fundamental basis for this ruling was the Court’s view that both “K” Line and KAM are “rail carriers,” because they arranged for inland movement of the cargo under the “K” Line through bill of lading, and “K” Line equipment (presumably meaning the container) was used in the inland movement. Your next question must be how could anyone think “K” Line or KAM is a rail carrier, when we have no cars, engines or trackage? Well, the Supreme Court found that a bit hard to digest as well. “K” Line and the UP asked the Supreme Court to review the case, and the petition was granted, which was about a one in a thousand chance. We did have a strong leg up because a similar issue had been covered in an earlier Supreme Court case, known as the Kirby case, and there was disagreement on the question among various federal appeals courts. Kirby had decided whether state law or federal maritime law applied to an inland move under an ocean carrier’s through bill, but did not decide the question presented in our case, which was whether the forum clause could be applied by the bill of lading to the inland move under the authorization in section 7 of COGSA, or whether COGSA was trumped by the Carmack Amendment, which does not allow forum clauses. In the Supreme Court briefing process, the Solicitor General of the United States took our side, while the World Shipping Council and the International Association of P&I Clubs, filed briefs supporting us, because the case was very important to the shipping community and its insurers. We made various arguments, including arguments about the wording of the competing statutes, but our main points were that “K” Line and KAM are not “rail carriers” as defined the Interstate Commerce Commission itself, that use of a “K” Line container for an inland move by the UP does not make “K” Line a rail carrier under the terms of the Interstate Commerce Act, and that a critical term in that Act would leave cargo interests without any court to sue in if they sued over a through movement from abroad. We pointed out that the Kirby rule, that uniform application of maritime law to all of a through movement was desirable, applied in this case as well. Finally, we outlined the chaos which would result from making “K” Line (much less KAM) out to be “rail carriers”: the FMC and the Surface Transportation Board would collide over regulation of through movements, utterly inappropriate railroad statutes could come into play, and the insurance structure would be undermined. (continued on page 11) KAM Marine Operations. A t the very heart of our business, ships appear to move around the world without effort arriving in port to conduct cargo operations before slipping back out into the deep seas on the next voyage. “K” Line has so many ships arriving and departing U.S. waters each week, little thought is given to this seemingly simple part of our business. Yet smooth ship arrivals and departures are the result of careful execution of an incredibly intricate set of procedures managed by an expert who is usually called the agent, or boarding agent. The agent is the first point of contact for any Master prior to the port call. The agent arranges the pilot, tugs, line handlers, and communicates with the Master to insure that all parties are on standby for the appointed arrival time. Sometimes arrivals have to be managed around unfavorable weather conditions, such as heavy winds, or fog, while at other times industry issues, such as congestion, create schedule challenges. Masters are reminded of local regulatory requirements, whether it is switching to low sulfur fuel or insuring that ballast water reporting forms are submitted to the regulatory agencies. Vessel access lists are developed for vendors such as ship chandlers, food service supply companies or repair technicians to fix a radar, a radio or some engine room machinery. The authorities, from Coast Guard, to Customs, to the Department of Agriculture, are notified and all of their many requirements for each vessel are coordinated and responded to. In non-container services, such as car carrier or bulk ships, the agent coordinates between the chief mate (who is responsible for cargo operations) and the stevedores. On the bulk ship side the agent usually boards vessels to watch the cargo hold inspections, negotiates overtime costs and berthing schedules, and creates and releases Bills of Lading. Agents also deal with crew health issues arranging crew member doctor visits in port, or coordinating a medical evacuation of an injured or ill seaman on the high seas. In short, the agent’s job is to insure everything is done so that ships get into and out of port as quickly as possible. 11 Captain Yokomizo boarding a car carrier at Port Newark. Considering the very high daily costs of operating a vessel, even a one hour delay is a costly expense, a fact that every boarding agent is constantly mindful of. A job well done is to get a ship in and out of port as per schedule and at minimal cost. Trouble shooting, problem solving, and quick thinking to work around unexpected problems are key skills for an effective boarding agent. Boarding agents work long hours and are always on call, 24/7. Their biggest pleasure is to shake hands with the Master before departure and receive his words of “Thank you and see you again!” At KAM we use a combination of sub-agents and KAM staff to handle the agent functions. The teamwork between subagents and KAM staff is carefully nurtured and always subject to fine tuning. Our own Marine personnel are dedicated, long term employees with strong local connections in their geographic areas. They are all experts and they are truly one of “K” Line’s secret weapons, working behind the scenes to insure that our customers may have the best possible shipping experience with “K” Line. Contributed by Chris von Kannewurff - KAM RIC (continued from page 10) The Incredible Voyage. All the Supreme Court Justices accepted our main arguments, while Chief Justice Roberts (an outstanding former Washington lawyer) and Justice Scalia ( a leading light on the Court) showed in their questioning at the argument that they fully understood the problems with the Ninth Circuit decision which we laid out. All the Justices agreed that “K” Line and KAM are not “rail carriers,” that the Carmack Amendment did not apply to us, and COGSA did apply under the terms of the “K” Line bill of lading. Three Justices dissented on the question of application of Carmack to the UP, but that did not dilute our victory on the main point of interest to us. So ended our Supreme Court voyage in defense of COGSA. Rounds of grog were enjoyed by all, and the case is reported in American Maritime Cases, June 2010, at page 1521. Contributed by John Meade – KAM Legal Counsel 20th Anniversaries Across KAM. Two Decades of Service for Dave Daly. Dave Daly proudly displays his commemorative watch. O n October 1, Dave Daly reached his 20th year of service with “K” Line America (KAM). We recently celebrated his accomplishment with Noriaki Yamaga presenting Dave with his 20th Anniversary commemorative watch. Dave spent his first four years with KAM in the Seattle office. His responsibilities included Export Traffic and Equipment management. His last position in Seattle was Distribution Supervisor. In spring of 1994, Dave accepted the position and responsibility of Manager, National Transportation Group (NTG). This group was relocated to Murray Hill headquarters in New Jersey. During his time in Murray Hill, Dave worked to take a young group (me included) with little or no experience in the industry and operated a 7-days-a-week, 24-hour-a-day operation. In the early days, the group consisted of two Managers and four Coordinators. In 1996, Dave was selected to work on a project to determine how TradeWare would work with KAM’s transportation processes. 12 Eventually, Dave transitioned to Information Systems Department (ISD) to work on the implementation of TradeWare. During his tenure, Dave worked toward the development of the Business Process Review department. This is when Dave’s passion (author’s note – settled on “passion”, but some other words that came to mind were “obsession”, “craze”, or “zeal”) for process improvement gained momentum within KAM. One of the earliest process improvement projects Dave worked on was the Intermodal Management System. Regrettably, TradeWare did not offer the functionality and visibility needed for NTG nor allow Field Logistics to efficiently dispatch and manage the North American intermodal product. Dave worked with a number of people to define and outline an application that supports the effective and efficient management of intermodal shipments. After three years in ISD, Dave returned to Liner Operations in 1999 to manage the National Logistics Group (LOG). Over the past 11 years, Dave’s responsibilities grew with Liner Operations to include LOG, NTG, National Equipment, “K” Line Total Logistics, and HazMat/Compliance/ Claims. Today, Dave holds the position of Vice President, Liner Operations & Product Management. He continues to work diligently in developing and coaching his staff. As the past couple of years has proven challenging for KAM, I appreciate the opportunity to draw from Dave’s 20-years of experience during these times. Thanks, Dave for your time and guidance… Congratulations! Contributed by John Feeney – KAM RIC 20 Years for Kathy Horvath. O n August 26 the Information Systems Department celebrated Kathy Horvath’s 20th anniversary with “K” Line America. In one of those funny coincidences, Kathy started working with me at MCC Corp., part of the family of “K” Line companies, doing PC (WHAT IS PC) support in Cranford, New Jersey. More than 10 years later we were reunited in Richmond. Kathy is responsible for the www.kline.com and “KAMNET” web sites. (continued on page 13) Kathy Horvath and Knut LaVine celebrate her 20-year anniversary with Information Systems Department staff. (continued from page 12) 20th Anniversaries. A good story that you’ll need to ask Kathy to give you the details on is how she got stuck in the headquarters office in Murray Hill during a huge snow storm that caused the Governor of New Jersey to declare a state of emergency and ban travel on the roads. Kathy, being the resourceful person she is, managed to scrounge food to survive being stranded. One of many colorful stories during her career with “K” Line America. Congratulations Kathy on 20 years with “K” Line America. Contributed by Knut LaVine – KAM RIC Natsuki Matsuura – A 20-Year Anniversary. become recognized as a top tier, high quality, and most reliable carrier. Nick’s knowledgeable logistics advice has been well received and evaluated by many Japanese customers who came to his territory over the years. His dedicated work with Southeastern VIP accounts (such as Japanese auto manufacturers and suppliers like Toyota Motor in Alabama and Texas, Honda in Alabama, Denso in Tennessee, and several others) has been well appreciated. Nick has a new assignment with his International Sales responsibilities. Beginning October 1, he will add the territory of the North Atlantic to his current Southeastern territory. He and his family will return to New Jersey after a 15 years absence from the area. Nick has a lot of memories in the NY/NJ area where he started work in the U.S. on the 99th floor of the World Trade Center, overlooking the Statue of Liberty and with so many vessels sailing on the Hudson River. Nick and the entire Matsuura family are loved by all of his co-workers and we will miss them upon their return to New Jersey. Please join me in congratulating Nick on achieving this impressive milestone. Contributed by Hiroyuki Morino – KAM LAX Twenty Years at KAM for Keiko Yamane. K eiko Yamane joined “K” Line America on July 23, 1990 as a Sales Coordinator in the KAM LAX office. Today her title is Senior Business Analyst and she has enjoyed working in the International Sales Department for over 20 years. Prior to joining KAM, Keiko worked in the Commercial Ocean Export Department of Nippon Express in Los Angeles for four years. Before coming to the U.S., she graduated from the Osaka College of Foreign Trade and worked in Teijin Shoji for three years in Osaka. Keiko has worked through some tough and historic times during her 20-year tenure, such as the 2002 LA/LB Lock-Out, as well as the days after 9/11. Keiko loves to travel and one of her particularly enjoyable trips was flying to Yellowknife, Canada to take pictures of the Aurora Borealis. Photography is one of her main hobbies and she has documented several KAM LAX events over the years. Something you may not know about Keiko is that she very creative and has frequently been the 1st place winner of our Halloween costume contest every year! Her scary costumes are the best! Keiko is loved by all of her co-workers and hopes to work at KAM for many years to come. Contributed by Michelle Boden – KAM LAX Mitch Wilkes (KAM ATL) presents Natsuki Matsuura with a watch celebrating his 20-years with “K” Line America. N atsuki “Nick” Matsuura joined “K” Line America on August 16, 1990. Before that he worked at Kawasaki Kisen Kaisha, Ltd. for 17 years, and his last role before coming to the U.S. was with the “K”Line Osaka branch export team to the United States. He worked for five years (1990-1994) in New York, and 15 years in Atlanta, (1995-2010). He devoted 20 years of his professional life working in International Sales (Japanese customers) to help “K” Line 13 Hiroyuki Morino, Keiko Yamane and Michelle Boden. SAL Training for Sales. WEDDINGS R Congratulations to David Macheska (CDS NJ) and Vivian Shapiro on their June 30 nuptials. ecently, senior members of KAM Sales gathered in Richmond together with the Richmond Management Team for a one-day training session introducing the Schiffahrtskontor Altes Land (SAL) Heavy Lift business to KAM. Joern Schinke from SAL’s headquarters in Steinkirchen, Germany led the six-hour training session using PowerPoint and video material to teach the attendees about M/V Paula carrying windmill blades. SAL; SAL’s fleet of heavy lift vessels; and, heavy lift operations, including sectors, as well as power plant equipment, technical planning. A good portion of the such as reactors or turbines, or windmill training session was spent on the commercial parts. Any heavy cargo in excess of 100 tons aspects of the heavy lift business, including could be considered, if it fits into a vessel common abbreviations (which are quite position, or if it is offered in adequate different from the liner side), contract terms volume. The 14 vessels operate in a semi and language, as well as target markets and tramp service and calls are subject to inducetarget commodities. The training was quite ment. Enough of the right type of cargo has interesting, allowing all attendees to walk to be available in one port, in order to attract away with a good overview of SAL and SAL’s a vessel call. Regular RORO or break bulk business priorities. business would not fit the target profile for KAM Sales is now tasked with seeking SAL. If anyone runs across a business opporout genuine heavy lift opportunities for SAL, tunity that appears to fit this SAL profile, targeting those customers who are not being please contact me for further exploration of contacted by the dedicated SAL Team in the business opportunity. Houston. Quite naturally the primary target Contributed by Chris von Kannewurff – KAM RIC cargoes are project business in the oil and gas David Macheska and Vivian Shapiro on their wedding day. Best wishes to Maiko and Yutaka Uchida (KLLUSA NYC) who were married September 5 in Yokohama. Maiko and Yutaka Uchida. Congratulations to Joseph Lomonaco (CDS NJ) and his bride Dana Lynn Henderson who wed September 11. Two SAL vessels rafted together while working in an oil field off the coast of Australia. 14 Joseph and Dana Lynn Lomonaco. The Wellness Corner If you have suggestions on what you would like to see in the Wellness Corner, please send your ideas to April Covington in the Contributed by April Covington - KAM RIC “K” Line America, Inc. Human Resources department. 15 BABY GREETINGS Congratulations to James and Eva Atkinson (KAM RIC) on the March 29 birth of their son, Eddie Atkinson, who weighed 9 lbs. 4 oz. and measured 22 inches long. It’s a boy for Cesario and Ana Martinez (KAM HOU). Arriving on August 9, Christian Noe Martinez, weighed 7 lbs. 3 oz. and 20.5 inches long. Best wishes to Maria and Ignacio Rodriguez (KAM LAX) on the August 11 birth of their daughter, Maya Paulina Rodriguez, who weighed 7 lbs. 5 oz. and measured 18 inches long. On August 12, Beatrice and James Ramirez (KLLUSA CHI) welcomed the arrival of their daughter, Marlyn Ramirez, who weighed 8 lbs. 4 oz. Congratulations to Christine Zhang (KLC VCR) and her husband, Stephen, on the September 15 birth of their son, Samuel Zhang, who weighed 9 lbs. 4 oz. and measured 21.25 inches in length. Eddie Atkinson sleeping like an angel. Maya Rodriguez with her three big sisters. MILESTONE ANNIVERSARIES November John Moore 20 Rosa Morales 20 Lisa Stone 20 Lodene Sublett 15 Yen Luc 10 Susan Perron 10 Donald Whang 10 Elizabeth Hartless 5 December Fredy Aparicio 20 Henry Munz 20 Phoung Tang 20 Lori Hill 15 Margaret Gillis 10 Cindy Mayfield 5 Nikki Winstead 5 January Maryanne Troyan 20 Stephani Yogi 20 Anita Arriola 10 Irma Battaile 10 Patricia Bryson 10 Joseph Lomonaco 10 Michael Wray 5 KAM SFO KAM NYC KAM RIC KAM CHI KAM RIC KLC TOR KLLUS LAX KAM RIC KLC TOR KLC TOR KLC VCR KLLUS NYC KAM RIC KAM RIC KAM RIC KAM CLE KAM RIC KAM RIC KAM RIC KAM CHI CDS NJ KAM RIC Equal Employment Opportunity Policy. Christian Martinez peering out at his new world. Christine Zhang holding her son Samuel. WELCOME ABOARD Outstanding people are the key to our success. Please welcome these new employees. July Joshua Fields KAM CHI Logistics Coordinator Heather Kieffer KAM CHI Account Manager August Joey Csapo KAM RIC Car Carrier Operations Analyst Stephanie Aviles CDS NJ Account Support Representative Frances Yeung CDS WAS Account Support Representative Tadd Bartley CDS RIC Senior Application Developer Charles Shelton KLLUS ATL Account & WH Agent Yumi Yu KLLUS NYC Air Export Operations Tomoka Teratani KLLUS CHI Air Export Operations Jeff Rogers KLLUS CHI Business Development Manager Nobuhiro Horie KLLUS DFW General Manager September Karen Crawford KAM RIC Human Resources Generalist 16 “K” Line America, Inc. believes that every employee has the right to work in surroundings that are free from all forms of illegal discrimination. It is this company’s policy that employees are provided equal employment opportunity at all times, without regard to race, color, sex, creed, religion, age, marital status, national origin, disability, armed forces or veteran status, or any other legally protected classification under state, local or federal laws. All employees are expected to work actively to maintain a work place which is free from illegal discrimination in all departments and at all levels of employee relations. Employees are expected to conduct themselves in their daily activities in such a way as to ensure that no discrimination occurs in any action with respect to any personnel decision, including compensation, benefits, privileges, transfers, reductions in workforce, or training. The “K” Files is a newsletter by employees for employees, and is edited by Corporate Human Resources with input by many employees whom we wish to thank. Employees are encouraged to submit articles and pictures to Corporate Human Resources, including marriages, births, awards, retirements, stories from your location regarding office projects, work in the community, etc. We’d love to hear from you!
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